Senate Majority Leader Harry Reid says the China currency bill is the most important jobs legislation Congress can enact, while House Speaker John A. Boehner calls it “dangerous” — and the White House has refused to take a stand.
“We share the concern of members about the valuation of the Chinese currency and the need to appreciate the value of the Chinese currency. We also are concerned that any action that might be taken would be effective and consistent with our international obligations,” White House press secretary Jay Carney told reporters Tuesday, demurring yet again on the issue that is dominating Capitol Hill. He wouldn’t commit to taking a stand before the Senate holds a final vote, which could come later this week.
The Senate officially began debating the bill Tuesday, after a 79-19 test vote Monday cleared the way. Mr. Reid used parliamentary moves to block out any amendments, trying to prevent the debate from spinning into a freewheeling fight over free trade and U.S. debt.
But even if the bill clears the upper chamber, it faces a stiffer path in the House, where Mr. Boehner said that Congress is not the right place to make such complex decisions.
“I think it’s pretty dangerous for us to move legislation in the United States Congress forcing someone to deal with the value of their currency,” the Ohio Republican told reporters at the Capitol.
“This is well beyond I think what the Congress ought to be doing. While I’ve got concerns about how the Chinese have dealt with their currency, I’m not sure this will fix it,” he said.
The bill has become enmeshed in campaign politics and the escalating focus on trade after Mr. Obama on Monday submitted three long-delayed free-trade agreements for Congress’ approval.
Sponsored by Democrats and Republicans, the measure would push the administration to find that China is getting an unfair trade advantage by holding down the value of the yuan. The measure would allow compensatory tariffs to be imposed on goods from countries that are deemed to be undervaluing their currency.
Chinese officials warned that if Congress passed the bill and Mr. Obama signed it, that could ignite a trade war between the two nations.
However, supporters said that’s already the reality.
“We are already in a trade war with China, and it’s not going that well,” said Sen. Charles E. Schumer, New York Democrat. “American companies are fighting for survival in the United States and around the globe, battling subsidized Chinese exports with a built-in price advantage of 20 percent to 40 percent.”
Mr. Reid on Monday had said he was certain the measure would pass the Senate and the House, but Mr. Boehner’s opposition makes it tougher.
House Democrats said if it comes to the floor of their chamber, it has a chance.
Minority Whip Steny H. Hoyer said a House version of the China currency bill has 218 co-sponsors — 61 of them Republican — and easily would pass the chamber. He added that a similar bill passed the House in the last Congress with broad bipartisan support.
“This is a bill that has enjoyed overwhelming bipartisan support,” said Mr. Hoyer, Maryland Democrat.
Even though he won’t take a stand on the currency issue, Mr. Obama wasn’t entirely mum on China on Tuesday. In his campaign speech to an audience in Texas, he warned that the U.S. risked falling behind in having newer infrastructure or faster railroads.
The bill presents a thorny problem for Mr. Obama. Many in his political base want to take steps to punish China, whose economy appears poised to eclipse that of the U.S., but presidents also try to keep as free a hand as possible in the conduct of foreign relations, and having a policy dictated from Capitol Hill could be problematic.
Mr. Carney, the White House spokesman, said the administration is “always in discussions with Congress” about issues such as China’s currency.
He would not say what the thrust of those discussions is, however.
Mr. Reid brushed aside the administration’s silence on the measure, choosing to see the optimistic side.
“They haven’t said they’re against it, either,” he said.
“There’s no question that we’re going to come up with something,” Mr. Reid said. The House will “come up with theirs, we’ll come up with ours, and we’ll work something out in conference. There’s wide support. That’s why we got 79 votes yesterday. There’s wide support for this legislation.”
Senators who support the crackdown said China won’t respond to cajoling by the U.S. or other nations.
“The only thing they understand is push back,” said Sen. Lindsey Graham, South Carolina Republican, who is one of the top co-sponsors.
“If you worry about job creation, you cannot let China continue to manipulate their currency and steal our intellectual property,” he said. “We’ve fought back against the Chinese when they’ve dumped steel below cost — the [George W.] Bush administration did. This would allow currency manipulation to be considered the same thing.”
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